Bitcoin & UTXO

Feb 18, 2023

  • What is UTXO ?

    La technologie blockchain de Bitcoin repose sur un concept clé appelé UTXO, ou “unspent transaction output” en anglais, qui est essentiel pour la sélection et l’association des entrées et des sorties de transactions pour effectuer des paiements. Les UTXO sont également importants pour déterminer si un bitcoin est en gain ou en perte lorsqu’il est transféré d’un utilisateur à un autre.

    Lorsqu’un utilisateur transfère des bitcoins à un autre utilisateur, il utilise les UTXO qu’il possède pour créer une transaction.
    La transaction doit être validée par la blockchain de Bitcoin avant que le transfert ne soit considéré comme final.
    Dans le cadre de la validation de la transaction, le logiciel de nœud complet de Bitcoin vérifie si l’utilisateur a suffisamment de UTXO pour couvrir la transaction. Si l’utilisateur a suffisamment de UTXO pour couvrir la transaction, la transaction est validée et les UTXO utilisés pour la transaction sont marqués comme étant dépensés.

    Explication par l’exemple

    Supposons que vous voulez envoyer 2 bitcoins à un ami en utilisant votre portefeuille Bitcoin. Pour cela, vous devrez sélectionner des UTXO pour couvrir le montant de la transaction.

    Supposons que vous ayez deux UTXO dans votre portefeuille :

    • UTXO1 : 1,5 bitcoins
    • UTXO2 : 0,7 bitcoins

    In this case, you can select both UTXOs to cover the 2 bitcoin transaction amount. You can then create a new transaction with two outputs:

    • Output 1: 2 bitcoins to your friend’s address
    • Output 2: 0.2 bitcoins (the difference between the sum of the UTXOs and the transaction amount) to your own address

    When you sign the transaction with your private key, both UTXOs are spent and can no longer be used for future transactions. The transaction is then transmitted to the Bitcoin network and added to the blockchain once miners have validated it.

    In this case, both UTXOs were used to cover the transaction amount, and a new UTXO was created to return the difference to you. This UTXO will be available in your wallet and can be used for future transactions.

    Want More Details?

    Let’s imagine that in the previous example, you received 1.5 bitcoins from a friend a few days ago, which were sent to your Bitcoin address.
    This means you have one UTXO worth 1.5 bitcoins associated with this address.

    Next, you bought 0.7 bitcoins on an exchange platform and sent them to your Bitcoin address.
    This creates a second UTXO of 0.7 bitcoins associated with the same address.

    So, your wallet now contains two UTXOs totaling 2.2 bitcoins in value.

    When you want to send those 2 bitcoins to your friend, you first need to select the UTXOs that will cover the transaction amount. In this case, you can select both existing UTXOs and spend them to cover the transaction amount.

    After creating the transaction, you need to sign it with your private key to prove that you are indeed the owner of the bitcoins to be sent. Then, you broadcast the transaction to the Bitcoin network.

    Miners will then verify the transaction to ensure that the UTXOs you’ve selected for the transaction are valid and have not been spent before. If the transaction is valid, the miners will add it to the blockchain and send you a confirmation of the addition.

    Once the transaction is confirmed, the two UTXOs you selected are spent and can no longer be used for future transactions. However, a new UTXO of 0.2 bitcoins is created and associated with your address to reflect the change in your wallet balance.

    This example shows how UTXOs are used to conduct Bitcoin transactions and how they are spent to cover the transaction amount. UTXOs have a specific value that can be spent in whole or in part to make a transaction. Once a UTXO is spent, it is replaced by one or more new UTXOs.

    UTXO: gains or losses?

    The UTXO is a key element in determining whether a Bitcoin is at a gain or a loss.
    To understand this, it’s important to remember that the value of each UTXO is fixed and corresponds to the amount of Bitcoin that was received in the transaction.

    Let’s take an example. Suppose you received 1 Bitcoin a year ago and haven’t moved this sum since. At that time, the value of 1 Bitcoin was $10,000. If you decide to sell this Bitcoin today at $50,000, you will realize a gain of $40,000.

    Using the UTXO, we can calculate the acquisition cost of this Bitcoin. The UTXO corresponding to this Bitcoin was created during the initial transaction and has a value of 1 Bitcoin. This UTXO can be considered the acquisition cost of your Bitcoin.

    Example

    If you sell this Bitcoin today for $50,000, your gain will be calculated as follows:

    • Gain = Selling Price – Acquisition Cost
    • Gain = $50,000 – (1 Bitcoin x $10,000)
    • Gain = $50,000 – $10,000
    • Gain = $40,000

    The UTXO corresponding to the Bitcoin was used to calculate the acquisition cost and determine whether the Bitcoin was sold at a gain or a loss. This is why the UTXO is an important element in tracking the performance of a Bitcoin portfolio and calculating the gains or losses realized on each transaction.

    Thus, the UTXO allows keeping track of the transaction history of each Bitcoin and determining whether a Bitcoin was bought at a lower or higher price than its current sale price.
    This is essential for calculating the gains or losses of each transaction and for tracking the performance of a Bitcoin portfolio.

    UTXOs can also be used to generate gains as a Bitcoin holder, miner, or full node.
    Notably: Bitcoin holders can generate gains by keeping their bitcoins and selling them at a higher price than they bought them, allowing them to realize a gain.
    Miners can earn bitcoins by validating transactions and adding blocks to the blockchain, allowing them to receive bitcoins as a reward.
    Full nodes can earn bitcoins by providing validation and verification services to the blockchain, for which they can be compensated in bitcoins.

    Now ?

    Big and perhaps good news, for the first time in over 10 months the number of profitable UTXOs exceeds 82%.

    The last known Bitcoin price range in a similar situation (over 82% in gains) was $43,000-$45,000.

    What does this tell us?

    Well, it indicates that many new UTXOs have been created below $19,000 – $20,000 where investors have accumulated more BTC.

    Is this a good sign for the markets? Wait and see.

Note: Il est important de se rappeler que le trading est une activité risquée et qu’il est important de se rappeler que les pertes sont possibles. Il est donc important de bien comprendre les risques associés au trading et de ne pas investir de l’argent qu’on ne peut se permettre de perdre. Il est aussi important de se rappeler que les performances passées ne garantissent pas les résultats futurs. Il est donc important d’avoir une stratégie de gestion de risque appropriée en place et de ne pas se fier uniquement à un seul indicateur pour prendre des décisions d’investissement.

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